What is a guaranteed renewable insurance policy?
If you’re planning to meet with your insurer, agent, or broker, to discuss your health insurance plans, the term ‘guaranteed renewable insurance policy’ will definitely come up. If you’re confused by what this means, why it matters to you, and whether you should get a plan that has guaranteed renewability, you’ve come to the right place.
In this blog by Pacific Prime Thailand, we’ll take you through all you need to know about a guaranteed renewable insurance policy, its benefits, and how you can find the best guaranteed renewable plan on the market.
Guaranteed renewable policy vs yearly renewal policy
Here’s a quick definition of a guaranteed renewable policy and a yearly renewal policy:
Guaranteed renewable policy
“A guaranteed renewable policy is an insurance policy that safeguards the insured from policy cancellations as long as the insured continues to pay for the policy’s premiums.”
Yearly renewal policy
With a yearly policy, the insured party has to manually renew their policy on a yearly basis, with the insurer having the ability to deny the renewal request based on a poor claims history, the insured’s age and other factors.
Guaranteed renewable policies are usually the preferred choice over yearly renewal policies for the following reasons:
- You’ll still be covered by the same plan even if you’re past a certain age.
- If you develop a chronic illness that needs continual treatment, you’ll still be able to renew your insurance policy.
- You’ll be able to renew your policy even if you’ve had a bad year and had to file multiple claims consecutively.
However, it’s important to note that while your policy renewal is guaranteed, the insurer is still able to make changes to your premiums and benefits from one year to another.
For instance, if you’re holding a retiree health insurance policy and you’ve developed a chronic illness that needs continual treatment for years to come, your insurer may increase your policy’s premiums in the following year.
Lifetime vs non-lifetime guaranteed renewals
Life and non-lifetime plans are the two main types of guaranteed renewable policies. Here’s the difference:
Lifetime renewal guarantee policies
These are health insurance policies that will cover you for your entire life, even if you are diagnosed with chronic diseases during the medical term. Of course, this is provided that you continue to pay for the annual premiums.
Non-lifetime renewal guarantee policies
These policies will only provide you health insurance coverage for a number of guaranteed renewal years. After that period, the insurer will reaccess whether they will continue providing you health insurance coverage.
This means that chronic medical conditions and other significant risk factors can still potentially lead the insurer to stop renewing your policy after the guaranteed period.
Since lifetime guarantee plans will cover for chronic illnesses that you may develop further down the line, they are the recommended option for anyone looking to purchase health insurance.
Minimizing premiums during plan renewals
As mentioned, although the insurer will not be able to deny your plan’s renewal under a guaranteed renewal insurance policy, they will still be able to increase your premiums significantly from one year to another.
So here are 3 simple ways of how to reduce your premium before renewing your health plan:
1. Review your plan
At the end of every policy year, you should reaccess each aspect of your plan’s benefits and look for coverages you no longer need. If you are able to remove any extra coverage that your plan provides, you could see your premiums decrease.
2. Implement a deductible
You may also want to ask your insurer if you are able to implement a deductible on your plan. A deductible is a set amount that you will need to pay out-of-pocket for each healthcare service before the insurer will provide you coverage.
Increasing or implementing deductibles can effectively lower your premiums. However, this strategy is not recommended if you visit the doctor on a regular basis, as you may end up paying more for healthcare than otherwise.
3. Reaccess your plan
Finally, if premiums on your guaranteed renewable policy increase significantly, you’ll want to reaccess whether it is still worth investing in your current plan and look for other more cost-effective alternatives.
Finding a quality guaranteed renewable plan
If you’re still searching for a guaranteed renewal policy, here are 3 most effective ways that will guide you to the right plan.
1. Find the right policy scope
First, you’ll want to compare different policy scopes and see which one best suits your medical needs and budget. There’s no point in opting for a global health insurance plan with a wide scope if you’re not going to be fully utilizing its benefits after all. So take your time and go through the different types of guaranteed renewable plans available to see which policy scope is best for you.
2. Find the right insurer
Purchasing a health insurance plan from the right insurer is crucial. For instance, if your insurer takes an unreasonably long time to process and handle your claims, it may mean you’ll have to spend a lot more time waiting than otherwise.
For this reason, you should do your research on the work processes of different insurers and make a decision as to which insurer is best for you.
3. Consult an expert
Finally, it’s best to consult an expert who will be able to help you compare different policies scopes and advise you on the best insurer for your medical needs. This is because doing your own research on different policies and insurers can be extremely time-consuming, especially when you’re not an industry expert.
With brokers like Pacific Prime, we’ll be able to provide free consultation sessions and free plan comparisons for you without any strings attached. If you’re looking for medical insurance for expat individuals or families, feel free to contact our team of experts today!
In his free time, Phuwit enjoys reading and playing badminton. He also loves a good cup of coffee.
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